The Space Coast Credit Union has sued Barclays and State Street over collateralized debt obligation (CDO) losses, Reuters reports. Barclays, which designed the Markov CDO I, backed by $2 billion of mortgage and other debt, has been accused of stuffing it with risky assets that it then bet against. Barclays selected riskier synthetic assets and safer cash assets to ensure that its bet would actually pay off. State Street, which co-wrote the offering documents and was Markov’s collateral manager, has denied the charges made in the complaint.
Click here for the story from Reuters.